Weekly Market Review - 05-10-2026

Oct 6

4 min read

Technology shares led gains while UK equities fell, as rising mortgage costs added to pressure on households. This week’s review also looks at higher Eurozone inflation, the ECB’s response to energy pressures and the FCA’s decision to step back from mandatory climate disclosures.

Market Recap.

Equity markets were mixed, with technology shares leading gains while UK stocks fell. The Nasdaq 100 ETF rose 2.01%, finishing strongly after a modest dip on Thursday. The S&P 500 ETF gained 0.53%, recovering in the final session after briefly slipping into negative territory.

The Dow Jones Industrial Average ETF declined 0.73%, despite recovering some of Thursday’s losses. UK shares experienced a sharper fall, with the FTSE 100 ETF down 1.96%. A small improvement on Friday offered limited relief after losses built through the week.

News.

UK mortgage costs have risen further, with the average five-year fixed rate reaching 6.00%, its highest level since September 2023. The average two-year fixed rate also increased to 5.98%, according to Moneyfacts.

The number of fixed-rate deals priced below 5% has fallen from 1,494 at the start of September to just nine, excluding products available exclusively in Northern Ireland. Major lenders have repeatedly increased rates as volatility in financial markets pushes up funding costs. The changes leave buyers and homeowners approaching the end of existing deals facing higher borrowing costs and fewer lower-rate options.

Inflation.

Eurozone inflation accelerated to an estimated 3.80% in September, up from 3.20% in August, according to Eurostat’s preliminary figures. Energy prices were the main source of pressure, rising 18.80% compared with a year earlier, following a 14.30% increase in August.

Services inflation also picked up, reaching 3.20% from 3.00%, while inflation in food, alcohol and tobacco increased to 1.40%. Non-energy industrial goods provided some offset, with price growth easing to 1.10%. The figures show that energy remained the strongest pressure, although increases were also evident in other parts of household spending.

Central Banks.

European Central Bank chief economist Philip Lane has said higher energy prices could weaken demand across the Eurozone, potentially limiting the need for further interest-rate increases. His comments come as investors assess the ECB’s next move following September’s rise in inflation.

Lane highlighted how increased energy bills can squeeze household spending and reduce activity in energy-intensive industries. Greater uncertainty may also encourage consumers to save rather than spend. These effects could partly offset the inflationary impact of higher energy costs, underlining the need to assess the wider economy when setting monetary policy.

Commodities.

Oil prices eased in early trading this week as improving Middle Eastern exports and a planned G7 release of emergency reserves reduced immediate supply concerns. Compared with last week’s quoted figures, US WTI crude fell 4.58% to $90.12 per barrel, while Brent declined 4.95% to $101.59. Risks to shipping and energy infrastructure continued to weigh on the outlook.

Precious metals were steadier. Gold was broadly unchanged, down 0.01% at $4,158.17 per ounce, while silver rose 0.52% to $61.40. Both gained in todays early session as weaker US employment data reduced expectations of an October interest-rate increase.

ESG.

The Financial Conduct Authority has dropped plans to make climate disclosures mandatory under new reporting standards for listed companies. Instead, businesses within scope will be able to explain why they have not provided the required information, retaining a “comply or explain” approach.

The decision follows concerns about reporting costs and the potential competitive disadvantage for UK-listed businesses facing stricter requirements than overseas rivals. The updated rules will align reporting with the UK Sustainability Reporting Standards from accounting periods beginning on or after 1 January 2027. Companies will still need to disclose relevant information or explain any gaps.

Geopolitics.

Russia and Ukraine have signalled further attacks on infrastructure as the conflict approaches winter. Ukrainian President Volodymyr Zelenskyy said Ukraine would increase strikes on Russian oil refineries in response to what he described as a broader Russian campaign against civilian infrastructure.

Russia’s defence ministry subsequently said it would intensify strikes on Kyiv and other parts of Ukraine. The announcements followed attacks on Ukraine’s energy network that forced power cuts. The escalation adds to concerns over winter electricity supplies in Ukraine and disruption to Russian fuel production, keeping energy infrastructure central to the conflict.

Week Ahead.

United States

Minutes from the Federal Reserve’s September meeting are due on Wednesday 7th, providing more detail on the decision to raise interest rates and officials’ assessment of inflation. Investors will examine the discussion alongside the latest signs of subdued hiring.

The University of Michigan’s preliminary October consumer survey follows on Friday 9th. Its measures of household confidence and inflation expectations will offer an update on how consumers are responding to price pressures, following September’s decline in sentiment.

United Kingdom Business surveys are the main focus early in the week. Monday’s final September Services PMI is followed by the Construction PMI on Tuesday 6th, providing a fuller picture of activity at the end of the third quarter.

The reports cover new business, employment and costs, helping investors assess demand and price pressures across the two sectors. Attention will then turn towards the next monthly GDP release, scheduled for 15th October, which falls outside this week’s calendar.

Eurozone

August’s retail sales figures are due on Tuesday 6th, offering an update on household spending after sales volumes fell in July. The release will help show whether demand recovered ahead of September’s acceleration in inflation.

The European Central Bank publishes the account of its September policy meeting on Thursday 8th. Investors will look for more detail on policymakers’ assessment of energy prices, underlying inflation and growth, and how those considerations could influence decisions at subsequent meetings.

It is important to note that the geopolitical situation remains highly fluid, and developments are changing rapidly. As such, the outlook may shift quickly as new information emerges.